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REFERENCE
GROUPS
WHAT IS A GROUP?
A
Group may be defined as two or more people who
interact to accomplish either individual or mutual
goals.
Classification of Groups by membership status
 Membership
Group: A group to which a person either
belongs or would qualify for membership in.
 Symbolic
Group: A group in which an individual is not likely
to receive membership, despite acting like a member by
adopting the group’s values, attitudes and behavior.
REFERENCE GROUP

A Reference Group is any person or group that serves as point of comparison (or
reference) for an individual in forming either general or specific values, attitudes,
or a specific guide for behavior.

From a marketing perspective, reference groups are groups that serve as frames
of reference for individuals in their purchase or consumption decisions.

These groups place no restriction on group size or membership nor does it require
that consumers identify with a tangible group.

Reference groups that influence general or broadly defined values or behavior are
called Normative Reference Groups (e.g. A child’s Normative Reference
Group is the immediate family) .

Reference Groups that serve as benchmarks for specific or narrowly defined
attitudes or behavior are called Comparative Reference Groups (A
Comparative Reference Groups might be neighboring family whose lifestyle
appears to be admirable and worthy of imitation).
TYPES OF REFERENCE GROUPS

Classified by:

Membership
 Symbolic

Extent of Interaction
 Direct versus Indirect

Nature of Attraction
 Aspirational versus Dissociative

Degree of Formality
 Formal versus informal

Informational Influence


Normative Influence


When a member of reference group provides information
used to make purchase decisions
When we conform to group norms in order to belong to that
group
Identification Influence

When we identify with, and internalize, a group’s values and
behaviours
TYPES OF REFERENCE
GROUP INFLUENCE
FACTORS ENCOURAGING CONFORMITY: A
REFERENCE GROUP MUST ...
 Inform
or make the individual aware of a specific product or
brand.
 Provide
the individual with the opportunity to compare his or
her own thinking with the attitudes and behavior of the
group.
 Influence
the individual to adopt attitudes and behavior that
are consistent with the norms of the group.
 Legitimize
the decision to use the same products as the group

Friendship Groups

Shopping Groups

Work Groups

Virtual Groups or Communities

Brand Communities

Consumer-action Groups

Celebrities
SELECTED CONSUMERRELATED
REFERENCE GROUPS

Friendship groups are typically classified as informal groups because they are usually unstructured
and lack specific authority levels.

In terms of relative influence, after an individual’s family, his or her friends are most likely to
influence the individual’s purchase decisions.

Seeking and maintaining friendships is a basic drive of most people.

Friends fill a wide range of needs: They provide companionship, security, and opportunities to
discuss problems that an individual may be reluctant to discuss with family members.

Marketers of products such as brand-name clothing, fine jewelry, snack foods, and alcoholic
beverages recognize the power of peer group influence and frequently depict friendship
situations in their advertisements.
FRIENDSHIP GROUPS

Two or more people who shop together, whether for food, for clothing, or
simply to pass the time, can be called a shopping group.

Such groups are often offshoots of family or friendship groups and
therefore, they function as what has been referred to as purchase pal.

The motivation for shopping with a purchase pal range from a primarily
social motive to helping reduce the risk when making an important decision.

A special type of shopping group is the in-home shopping party, which
typically consists of a group that gathers together in the same home of a
friend to attend a “party” devoted to demonstrating and evaluating a specific
line of products.
SHOPPING GROUPS

The sheer amount of time people spend at their jobs,
frequently more than 35 hours per week, provide ample
opportunity for work groups to serve as a major influence
on the consumption behavior of the members.

Formal Work Group: it consists of individuals who work
together as part of a team, and thus have a sustained
opportunity to influence each other’s consumption related
attitudes and actions.

Informal Work Group: it consists of people who have
become friends as a result of working for the same firm,
whether or not they work together as a team, and they can
influence the consumption behavior of other members
during coffee or lunch breaks or at after-work meetings.
WORK GROUPS

A virtual team (also known as a geographically dispersed
team or distributed team) is a group of individuals who work across time,
space and organizational boundaries with links strengthened by webs
of communication technology.

Powell, Piccoli and Ives define virtual teams in their literature review article "as
groups of geographically, organizationally and/or time dispersed workers
brought together by information and telecommunication technologies to
accomplish one or more organizational tasks.”

Ale Ebrahim, N., Ahmed, S. & Taha, Z. in their recent (2009) literature review
paper, added two key issues to definition of a virtual team “as small temporary
groups of geographically, organizationally and/ or time dispersed knowledge
workers who coordinate their work predominantly with electronic information
and communication technologies in order to accomplish one or more
organization tasks”.
VIRTUAL GROUPS OR
COMMUNITIES

Members of virtual teams communicate electronically and may never
meet face-to-face.

Virtual teams are made possible by a proliferation of fiber
optic technology that has significantly increased the scope of offsite communication.

Virtual teams allow companies to procure the best talent without
geographical restrictions.

According to Hambley, O’Neil, & Kline (2007), "virtual teams require
new ways of working across boundaries through systems, processes,
technology, and people, which requires effective leadership...despite the
widespread increase in virtual teamwork, there has been relatively little
focus on the role of virtual team leaders."
CONTD…
BRAND COMMUNITIES

A brand community is a community formed on the basis of attachment to
a product or marquee.

Recent developments in marketing and in research in consumer
behavior result in stressing the connection between brand,
individual identity and culture. Among the concepts developed to explain the
behavior of consumers, the concept of a brand community focuses on the
connections between consumers.

A brand community can be defined as an enduring self-selected group of
actors sharing a system of values, standards and representations (a culture)
and recognizing bonds of membership with each other and with the whole.

Brand communities are characterized in shared consciousness, rituals and
traditions, and a sense of moral responsibility.

The term "brand community" was first presented by Albert Muniz Jr. and Thomas C. O'Guinn in a
1995 paper for the Association for Consumer Research Annual Conference in Minneapolis,
Minnesota.

In a 2001 article titled "Brand community", published in the Journal of Consumer
Research (SSCI), they defined the concept as "a specialized, non-geographically bound
community, based on a structured set of social relations among admirers of a brand." This 2001
paper has been acknowledged by Thomson Scientific & Healthcare to be one of the most cited
papers in the field of economics and business.

Many brands provide examples of brand communities. In computers and electronics: Apple
Inc. (Macintosh, iPod, iPhone), Holga and LOMO cameras, and Palm and Pocket PC Ultra-Mobile
PCs.

In vehicles: Ford Bronco, Jeep, automobiles, and

Royal Enfield and Harley-Davidson motorcycles.

In toys: Barbie and Lego.
CONTD…
CONSUMER-ACTION
GROUPS
A particular kind of consumer group-A Consumer Action

Group-has emerged in
response to the consumerist movement. Today there are a large number of such groups
that are dedicated to providing consumer products in a healthy and responsible manner,
and to generally add to the overall quality.

For example, a diverse range of consumer concerns being addressed by private and public
consumer-action groups: neighborhood crime watch, youth development, forest and
wildlife concerns, children and advertising, race and ethnicity, community volunteerism,
legal assistance, public health, disaster relief, energy conservation, education, smoking,
the environment, access to telecommunications, science in the public interest, credit
counseling, privacy issues, and children and internet.
Two broad categories of Consumer Action Groups:

Those that organize to correct a specific consumer abuse and then disband (Agitation
against liquor shop in a community) .

Those that organize to address broader, more persuasive problem areas and operate over
an extended or indefinite period of time (Group against drunk driving).

A celebrity is a person who has a prominent profile and
commands a great degree of public fascination and influence
in day-to-day media. The term is often synonymous with
wealth (commonly denoted as a person with fame and
fortune), implied with great popular appeal, prominence in a
particular field, and is easily recognized by the general public.
CELEBRITIES

A second type of reference group appeals used by
marketers is the expert, a person who, because of his or her
occupation, special training, or experience, is in a unique
position to help the prospective consumer evaluate the
product that the advertisement promotes.

e.g. An ad for a quality frying pan may feature the
endorsement of a chef.
THE EXPERT

A reference group appeal that uses the testimonials of
satisfied customers is known as the common-man
approach.

The advantage is that it demonstrates to prospective
customers that someone just like them uses and is satisfied
with the good or service being advertised.

The common man appeal is especially effective in public
health announcement (such as antismoking or high B.P.
messages), for most people seem to identify with people
like themselves when it comes to such messages.
THE COMMON MAN
THE EXECUTIVE AND EMPLOYEE
SPOKESPERSON

The popularity of this type of advt. probably is due to
the success and publicity received by a number of
executive spokespersons.

Like
celebrity
spokespersons,
executive
spokespersons seem to be admired by the general
population because of their achievements and the
status implicitly conferred on business leaders.

e.g. Ratan Tata, K. Birla, Mukesh Ambani etc.

These are often employed as attention grabbers, acting as
spokespersons to promote children’ products.

Trade characters are intended to bond a child to a brand so
that the child’s brand awareness might form the basis of
brand preference either immediately or later in life.

e.g. Animated characters used by marketers in
advertisements for children products
TRADE OR SPOKES-CHARACTER

A variety of other promotional strategies can function
creatively as frames of reference for consumers.

Respected retailers and the editorial content of selected
special interest magazines can also function as frames of
reference that influence consumer attitudes and behavior.

e.g. Indian Dental Association’s seal of approval for
toothpaste.
OTHER REFERENCE GROUP
APPEALS